Are these 2 top ASX growth shares buys?

City Chic is one of the ASX growth shares with a lot of potential. Is it a buy?

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Key points

  • This article is about two leading ASX growth shares
  • One is global apparel retailer City Chic which is quickly growing in the US
  • Doctor Care Anywhere is another ASX share which is increasing revenue and profitability

Some of the leading ASX growth shares have seen their share prices dip, or plunge, since the start of the year.

This period of time could be an interesting one for investors looking for opportunities.

A business isn't necessarily a better buy because it has fallen in price. However, for some it certainly can mean it's better value.

With that in mind, here are two top ASX growth shares:

City Chic Collective Ltd (ASX: CCX)

City Chic is one of the world leaders when it comes to retailing plus-size clothing, footwear and accessories for women. It operates a number of brands across different markets including City Chic, Evans and Avenue.

The business continues to see rapid sales growth. In the 26 weeks to 26 December 2021, City Chic's sales revenue rose by 49.8% to $178.3 million. The Americas are particularly driving this strength.

ANZ sales rose 14% to $80.8 million and Americas revenue increased by 62% to $77.2 million. ANZ was hurt by lockdowns, which closed stores. The Americas' growth was attributed to re-engaging the significant Avenue customer base, with trading materially above pre-acquisition levels. The City Chic USA website is also performing strongly.

Global supply chain pressures continue, driven by freight capacity shortages and delivery delays coming out of key areas. But, to combat this, the company invested in additional inventory. This has supported sales.

The business continues to expand organically and with acquisitions. It recently acquired the customer lists, brand and URL of CoEdition – a USA plus-size online marketplace.

Ord Minnett rates it as a buy, with a price target of $6.30. It values the ASX growth share at 28x FY23's estimated earnings.

Doctor Care Anywhere Group PLC (ASX: DOC)

The Doctor Care Anywhere share price has sunk 32% since the start of the 2022 year, despite the ongoing progress that the business is making.

It's a business that enables patients to digitally connect with healthcare professionals.

Doctor Care Anywhere recently released its update for the final quarter of 2021, allowing it to announce some full-year numbers. Group revenue was $46.3 million, representing 115.7% growth year on year.

But it's not just revenue increasing, profitability has gone up too. In the fourth quarter, the gross profit margin increased by 5.4 percentage points to 35.7%.

The growth trajectory continued throughout the fourth quarter of 2021, with revenue and consultations up 35.9% and 22.7% respectively. Approximately 50,500 new patients used the service during the quarter.

A new operating model was announced in December 2021, which is expected to deliver "significant improvements" in both the margin and profitability as it is rolled out during 2022. Patients will now get improved access to the right care, at the right time, for a larger number of people.

Instead of the only option being a 20-minute virtual consultation, patients will also be able to have a 20-minute virtual consultation with an advanced nurse practitioner or a quick consult where a patient completes a questionnaire to be reviewed by a prescribing clinician resulting in written advice or prescription without the need for a real-time video or phone consultation.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Doctor Care Anywhere Group PLC. The Motley Fool Australia has recommended Doctor Care Anywhere Group PLC. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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